Hong Kong fashion firm Lever Style identifies fund linked with Alibaba founders as cornerstone IPO investor in digital push

Lever Style, a fashion supply chain manager whose heritage dates back 63 years to a shirt factory in Hong Kong, has enlisted a firm linked with the founders of e-commerce giant Alibaba Group Holding to become a cornerstone investor in its initial public offering, which is expected to raise up to HK$195 million (US$23 million).

Poolside Ventures – a fund managed by Blue Pool Capital, which invests the personal wealth of people including Alibaba founders Jack Ma and Joseph Tsai – will buy US$4 million worth of Lever shares for a stake of about 5 per cent, according to its listing prospectus, which was published on Thursday. Alibaba owns the South China Morning Post.

Lever’s move is in line with its strategy to pursue more business from so-called digitally native brands.

Fung Group, the parent of 113-year-old consumer goods supply chain manager Li & Fung, which first became a strategic Lever shareholder 12 years ago, will sell 12.8 million shares through its unit Fung Investments as part of the IPO. This will cut its stake to 14.4 per cent from 21.9 per cent.

“While the Fung family is still involved and is supporting us as a shareholder, since our business has been transforming, to the point that e-commerce operators account for half of our business and will keep rising, I want to find new strategic investors active in the e-commerce space during the IPO process,” Stanley Szeto Chi-yan, Lever’s chairman, said in an interview.

Lever was founded in 1956 as shirtmaker Lever Shirt by Richard Wai Szeto, Stanley Szeto’s grandfather, during the golden age of Hong Kong’s manufacturing industry. Production was moved to Shenzhen in the 1980s, and at one point Lever had more than 7,000 workers in three facilities. These were sold in 2016 as Lever transformed into an asset-light supply chain manager.